GameStop – The Industry’s Stock Market

Last month GameStop announced a new trade-in policy that would net gamers more money for their used games. In an attempt to understand the new policies I took a trip to my local GameStop to get the scoop on these new changes. And while I did get some information on the new policies, I left with a greater understanding and sense of worry GameStop’s new practices. (Names have been changed)

A Trade By Any Other Name

When I first arrived at the store I was somewhat nervous. The store was quite crowded and I did not know how receptive the staff would be to my request for information. I stepped up to the counter and spoke with Candice. “Hello, I am a writer and I am working on a story about the new trade-in policies and how to get the most money from your trade-in.” She smiled with a semi-confused look on her face.

The first thing she told me is that GameStop no longer uses the word trade. Trade-in, traded, trading…those words no longer exist for GameStop. Instead, GameStop now ‘buys back’ games from customers. Gamers don’t trade games into GameStop, now they sell them back. Apparently, the term confused parents into thinking ‘trade’ meant that they could trade in one game and get another without paying any money.

After explaining the new terminology, Candice then proceeds to tell me how the new program puts more money in the pockets of gamers. When I asked how, that’s when she deferred me to Robert, who was busy with a customer explaining the merits of used games, the powerup membership, and how to get the most from today’s transaction.

“It’s Weird As Hell”

After waiting about twenty minutes, I was finally able to speak to Robert. When I told him what I was doing he chuckled and said “it’s weird as hell”. I laughed and told him I wouldn’t put his phrasing this story, but he told me that it didn’t matter. Robert who seemed to know a bit more about the system gave me the rundown.

GameStop’s original system consisted of promotions for trade-ins. According to Robert, promotions would often run in tandem and confuse customers. Parents would walk up the counter ready to trade in a game and be hit with all the promotions (that actually worked in their favor) causing confusion and usually sending them out the door. Under the new plan, the company removed the promotions and instead built them into the price of the used games. This is how we get more money for games. So those promotions you used to see every month…gone.

I won’t lie, when he originally explained the new system it took a few minutes for me to understand. The old system was quite confusing and the transition to the new system wasn’t any clearer. When I finally understood what was happening I proceeded to ask him about the different ways we can “sell” our games. I was again met with a confused look. It seemed no one knew about the new price tiers. Either that or they aren’t supposed to tell us about the new system. What he did tell me before going back to the register is that having up a PowerUp Rewards card is the best way to get the most for your used games and that the new system puts more money in the hands of gamers.

The Stock Market

After Robert left, Candice asked if I had everything I needed. I nodded my head yes, because it was clear that I wasn’t going to get all the details but I had enough to get a sense of what was going on. That’s when I spoke with the manager, who finally gave me the insight I needed.

Being the only game in town, GameStop has created quite the market for itself in respect to used games. What can only be described as the industry’s stock market, getting the most from GameStop requires a gamer to become savvy day trader. Used game values are based on three important factors

The Game

Demand

How it’s selling

Some games command a higher value based strictly on the brand. Other games can find a higher value due to a spike in demand. It’s simple economics–if the game is flying off the shelves then GameStop will pay more to have it on its shelves. These changes in the market are what cause the price fluctuations for used games. It’s why one day you might get $15 dollars for a game and the next day you only get $2.

Taking Advantage of the System – 30 Days

So with various price fluctuations and a new ‘trade-in’ system, how do you get the most for your money? The answer–beat every game in 30 days.

So here’s how it works. Madden was just released last month and the buyback value is $40 (for PlayStation 4 and Xbox One). If you wanted to save money on Destiny, you would need to sell Madden before the 26th of September in order to put that $40 towards Destiny. You could gain even further discounts by selling more games towards your purchase. Once you picked up Destiny, you would then need to play as much as you could within the 30 day window before selling it back for the max value. The value of games drops every 30-40 days. So every month you have a game, the more money you potentially lose on your sell.

But here’s where it gets interesting. The manager told me that games with numbers need to be sold before the next game is announced. For example, when NBA 2K15 drops, you need to have sold it before NBA 2K16 is announced, otherwise you will take a large hit in the money you could earn on the sell. He also told me of times where certain games become popular, seemingly overnight, and drive the price to levels that you normally see for rare SNES games.

The House Always Wins

When I finally left the store I couldn’t help but get the feeling that nothing has really changed. Employees still push the PowerUp Rewards membership to confused parents while making money on every used game transaction. While other retailers try to get in on the used game market, GameStop has created a monopoly. Employees, while they do their best to create a good shopping experience, never have the full picture of what’s going on. And because they never have all the details, the customer is usually left in the dark. After listening to the manager explain the buyback system I said, “it seems if I don’t sell the game before 30 days I might as well keep it.” That’s when he said that I should sell the game anyway because that’s money that’s not being used and it’s a game that the store could use. And as long as we look at games as games and not commodities in a stock market, GameStop will always have the upper hand.